Correlation Between WisdomTree Aluminium and WisdomTree Enhanced
Can any of the company-specific risk be diversified away by investing in both WisdomTree Aluminium and WisdomTree Enhanced at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining WisdomTree Aluminium and WisdomTree Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Aluminium 2x and WisdomTree Enhanced Commodity, you can compare the effects of market volatilities on WisdomTree Aluminium and WisdomTree Enhanced and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in WisdomTree Aluminium with a short position of WisdomTree Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Aluminium and WisdomTree Enhanced.
Diversification Opportunities for WisdomTree Aluminium and WisdomTree Enhanced
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Aluminium 2x and WisdomTree Enhanced Commodity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Enhanced and WisdomTree Aluminium is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on WisdomTree Aluminium 2x are associated (or correlated) with WisdomTree Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Enhanced has no effect on the direction of WisdomTree Aluminium i.e., WisdomTree Aluminium and WisdomTree Enhanced go up and down completely randomly.
Pair Corralation between WisdomTree Aluminium and WisdomTree Enhanced
Assuming the 90 days trading horizon WisdomTree Aluminium 2x is expected to generate 2.38 times more return on investment than WisdomTree Enhanced. However, WisdomTree Aluminium is 2.38 times more volatile than WisdomTree Enhanced Commodity. It trades about 0.11 of its potential returns per unit of risk. WisdomTree Enhanced Commodity is currently generating about 0.14 per unit of risk. If you would invest 251.00 in WisdomTree Aluminium 2x on November 14, 2025 and sell it today you would earn a total of 36.00 from holding WisdomTree Aluminium 2x or generate 14.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
WisdomTree Aluminium 2x vs. WisdomTree Enhanced Commodity
Performance |
| Timeline |
| WisdomTree Aluminium |
| WisdomTree Enhanced |
WisdomTree Aluminium and WisdomTree Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Aluminium and WisdomTree Enhanced
The main advantage of trading using opposite WisdomTree Aluminium and WisdomTree Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Aluminium position performs unexpectedly, WisdomTree Enhanced can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in WisdomTree Enhanced will offset losses from the drop in WisdomTree Enhanced's long position.| WisdomTree Aluminium vs. WisdomTree Zinc | WisdomTree Aluminium vs. WisdomTree Brent Crude | WisdomTree Aluminium vs. WisdomTree Enhanced Commodity | WisdomTree Aluminium vs. WisdomTree Gold 3x |
| WisdomTree Enhanced vs. WisdomTree Zinc | WisdomTree Enhanced vs. WisdomTree Brent Crude | WisdomTree Enhanced vs. WisdomTree Aluminium 2x | WisdomTree Enhanced vs. WisdomTree Gold 3x |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |